Korea Zinc Offers Public Tender at 830,000 KRW per Share
... 11% Higher than Yeongpung's Price
Yeongpung Claims "Korea Zinc Board Members Criminally Sued"
Korea Zinc, which is in a management rights dispute with the Yeongpung·MBK Partners alliance, has resolved to pursue a tender offer for treasury shares at a price higher than Yeongpung's public tender offer price. After Yeongpung's injunction request to prohibit Korea Zinc from acquiring treasury shares was dismissed, Korea Zinc has begun a full-scale counterattack. In response, Yeongpung filed an additional injunction to block Korea Zinc's tender offer and filed a criminal complaint against the Korea Zinc board members who resolved the tender offer on charges of breach of trust.
On the 2nd, Korea Zinc announced, "We will purchase 3,209,009 shares, which is 15.5% of the total issued shares, at 830,000 KRW per share." This price is 80,000 KRW (11%) higher than Yeongpung's tender offer price of 750,000 KRW per share. The total acquisition amount is 2.6634 trillion KRW.
Korea Zinc's tender offer period is from the 4th to the 23rd of this month. This treasury share acquisition, conducted jointly with Bain Capital, is planned to be fully canceled afterward. Bain Capital's maximum expected acquisition is about 2.5% of the total issued shares (517,582 shares). Currently, Yeongpung·MBK Partners hold a 33.1% stake. Chairman Choi Yoon-beom's side at Korea Zinc has secured about 33.9%, including friendly shares.
This announcement came after the Seoul Central District Court dismissed the injunction request filed against Chairman Choi Yoon-beom's side to prohibit the acquisition of treasury shares. Previously, Yeongpung had filed an injunction to prevent Korea Zinc from acquiring treasury shares during their tender offer period (September 13 to October 4), but the court ruled that Korea Zinc could also purchase treasury shares during this period. Yeongpung's claim that "Korea Zinc is a special related party belonging to Yeongpung's affiliates, so treasury share acquisition is impossible under the Capital Market Act" was not accepted.
After Korea Zinc resolved the tender offer at 830,000 KRW per share, Yeongpung launched another counterattack. Yeongpung filed an injunction request with the Seoul Central District Court to halt Korea Zinc's 'tender offer for the purpose of acquiring treasury shares (tender offer for treasury share purchase)' procedure. After the injunction request against Chairman Choi Yoon-beom's side was dismissed, they filed a separate injunction to block Korea Zinc's treasury share acquisition moves.
Additionally, Yeongpung filed a criminal complaint against the Korea Zinc board members who approved the tender offer for treasury share acquisition. According to sources in the investment banking (IB) industry and legal circles, Yeongpung·MBK submitted a complaint to the Seoul Central District Prosecutors' Office on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust). Yeongpung and MBK argue that "Treasury shares can only be disposed of after six months of acquisition, and considering that stock prices tend to revert to previous levels after the tender offer ends, Korea Zinc's treasury share acquisition constitutes breach of trust."
On the other hand, Korea Zinc's position is that "Even if the treasury share acquisition price is set higher than the market price, since it is an act of returning profits to the company's shareholders, breach of trust itself cannot be established."
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